Senator Sherrod Brown (D-Ohio) has introduced legislation to address the lengthy process of completing real estate short sales. The process of short sales continues to frustrate all parties involved and frequently results in offers being withdrawn and sales falling through. A short sale is one in which the lender agrees to accept less than the balance on its mortgage in order to expedite the sale of the home to a private buyer.
Last week Senator Brown introduced the Prompt Notification of Short Sale Act which will require banks to respond in a timely manner when a prospective buyer is attempting to buy one of these underwater homes. The proposed legislation requires the bank to provide a written response of an acceptance, rejection, counter offer, or the need for an extension of time, within 75 days of a request from a homeowner-thereby providing both buyers and sellers of short sale properties with predictability and a time frame during a real estate transaction.
In introducing his legislation Senator Brown stated, “For most buyers, short sales are anything but. The seemingly endless waiting game associated with short sales represents a dangerous drag on our housing market. If we’re going to recover from the housing crisis, we need to make it easier for qualified candidates to purchase homes. This commonsense legislation helps prospective home buyers and distressed homeowners alike, while helping to rebuild our neighborhoods and to foster long-term economic growth.”
Anyone involved in the real estate industry can tell you that it can take many months to get any kind of response from banks or other loan servicers to short sale offers. We hear all of the time about buyers, sellers, real estate agents, and loan officers complaining about the process which often requires multiple signatures to get the initial offer approved. Any additional adjustments to the purchase offer, such as, following the appraisal, or a housing inspection, can set the process almost back to the start, with more signatures and paperwork required. Quite often, during the short sale process there is a break in communication between the loan servicers and the prospective buyer, and as a result, buyers are not being kept informed about the status of their sale.
Perhaps if this passes we may see a change in the industry.
The Mellor Law Firm handles short sales in Riverside county and surrounding areas. Contact Attorney, Mark Mellor today for a consultation.
*The content for this article was adapted from Jann Swanson, Ohio Senator Attempts to Speed the Short Sale Process, Mortgage News Daily (Apr 9, 2012, 12:37PM),